The national multifamily market continued its strong performance into the second quarter, with the average rent increasing by another $15 in April, to a new high of $1,659, according to Yardi Matrix’s latest survey of 140 markets. The rate of growth moderated by 50 basis points, but remains high at 14.3 percent year-over-year. The average U.S. multifamily asking rent increased by $50 since the beginning of 2022. Demand appears to be slowing in the Sun Belt and West regions, as the average occupancy rate in stabilized properties year-over-year has decreased in four metros—Las Vegas (-0.8 percent), Phoenix and Sacramento (-0.5 percent) and the Inland Empire (-0.4 percent). Meanwhile, New York and San Jose were in the lead, with 2.4 percent gains.
Despite the softening economic growth right after the record year for the multifamily sector, the market continues to post remarkable performance, with the year-over-year growth rate above the 14.0 percent mark for five consecutive months. Still, headwinds have intensified: the U.S. economy contracted by 1.4 percent in the first quarter of 2022—due to surging inflation, ongoing supply chain issues, shrinking business inventories and the omicron outbreak. Moreover, the Federal Reserve will likely maintain its rigid policies that will hinder growth. Still, the demand-supply dynamic for multifamily is strong enough to withstand a modest economic slowdown. Furthermore, the employment market is recovering well and increased consumer spending during the first quarter points to healthy household finances. The for-sale segment of the housing market is likely to be impacted more and keep some renters in apartments, but household formation is anticipated to remain strong.
—Posted on May 23, 2022
The national average asking rent has decelerated compared to the breakneck pace of 2021, but otherwise marked new record gains in March, according to the latest Yardi Matrix survey of 140 markets. The average U.S. growth rate slid 50 basis points to 14.8 percent on a year-over-year basis, bringing the overall average rent to an all-time high of $1,642, up $14. Rent performance during the first quarter of 2022 also marked a record, with rents up 2.1 percent, or $34. The overall asking rent is $212 higher than it was in March 2021.
It’s expected that rent growth will moderate below 2021 levels, especially compared to the levels seen in the second quarter. Household formation is also likely to soften this year—estimates put the number of new households formed in 2021 in the two million range, while for 2022, household growth and absorption are expected to drop to about half.
—Posted on Apr. 27, 2022
The much-anticipated rent depreciation evaded the month of February, as the market actually defied expectations, with year-over-year growth at 15.4 percent, according to Yardi Matrix’ latest survey of 140 markets. The gain marks a new peak and translates to a $10 rise in the average U.S. asking rent, to $1,628. Moreover, of the top 30 metros, 90 percent posted double-digit rent growth on an annual basis, with the slowest registered in the Twin Cities, at 5.3 percent. Even though rent growth is estimated to slow down below the pace set starting in March 2021, demand doesn’t show signs of cooling off.
The same robust demand continued through the start of 2022, reflected in the average occupancy rate in stabilized properties, which rose 120 basis points year-over-year as of January. Of the top 30 markets, only two had occupancy rates below the 95 percent mark, a significant improvement from 17 a year ago. The occupancy rate points to a rebound in gateway markets, which during the first year of the pandemic saw population declines: New York (2.9 percent), San Jose (2.8 percent) and Chicago (2.6 percent). High-growth/high-supply metros also posted solid increases in occupancy—Nashville (2.3 percent) and Austin (2.1 percent). Phoenix, Sacramento and the Inland Empire (-0.2 percent) and Las Vegas (0.1 percent) reported the weakest performances. However, these markets already had tight occupancy rates and some of the highest asking rent growth performances in the nation, due to their alluring profile to renters relocating from more expensive locations.
—Posted on Mar. 25, 2022
In the first month of 2022, the national average asking rent posted an $8 increase, to $1,604, marking yet another new high, according to the latest Yardi Matrix survey of 140 markets. The gain represents a 13.9 percent year-over-year increase, 30 basis points above December. Even though there’s a low likelihood that performance will remain as elevated throughout 2022, January’s rate signals continued demand.
The average U.S. asking rent rose to $1,600 from $1,500 in just seven months and $1,500 from $1,400 in 10 months. Previous $100 increment increases took two to three years or more, according to Paul Fiorilla, author of the report and associate director of research at Yardi Matrix. “The recent rent growth acceleration is unprecedented,” he said.
—Posted on Feb. 28, 2022